The Bounded Creativity of Central Bankers

Central bankers in the United States and Europe became conservative heroes in the 1980s, then fell from their pedestals in the 2010s.  Yet this evolution cannot be easily understood as political scapegoating of independent central bankers, or as a reaction to the central banks’ perceived responsibility for the financial crisis and its aftermath.  As I argue, it can be traced back to central bankers’ policy innovations, which in turn involved a re-association of heterogeneous realities – central banking itself, as a set of organizational practices and tools; economics, as a discipline and as a set of market processes; and government, as a set of partisan-political and public processes.  In the 1980s, central banks supported hard money and lower deficits policies, which heralded the emergence of a technocratic form of neoliberalism. Then, in the 2010s, central banks veered toward easy money and ceased to advocate balanced budgets, thus provoking a more populist mutation of neoliberalism. If we want to better understand the waxing and waning of technocratic neoliberalism, we must pay more attention to particular intersections of organizational, disciplinary, market, and governmental processes than were not mutually independent.